Sentiments was nervous as traders eye US Fed meet amid lack of major data

Asian stocks slipped after yesterday's gains as wary investors sold their holdings following firm undertone in the US dollar and selling pressure in commodities. The sentiments was nervous as traders eyed the US Fed meet, which is starting later on today and lack of major economic data on the global front kept the downside pressure on throughout the session. This made stocks gave up yesterday's gains when the buying spree in the Asian markets as China signaled an end to the yuan's fixed rate to the dollar, boosting confidence in the global economic recovery and lifting the outlook for world exports.

Weakness in global stocks triggered profit taking on the domestic bourses, with metal and IT stocks leading the decline. Bank stocks also fell. Index heavyweight Reliance Industries (RIL) edged lower in volatile trade. The BSE 30-share Sensex fell 126.86 points or 0.71%. The Sensex had jumped 1,259.45 points or 7.5% in nine trading sessions to settle at 2-1/2 month closing high of 17,876.55 on Monday, 21 June 2010, from a recent low of 16,617.10 on 8 June 2010.

US stocks erased triple digit gains at Wall Street on Monday, 21 June 2010 and ultimately ended little lower. Traders continued to mull over the fact of unleashed yuan's effect on world trade though the same has been considered good till now. Stocks started the day higher riding on the back of strong Asian stocks across the world but the rally fizzled out due to the lack of any support on any major front. Corporate news and data flow was not there today to dictate market momentum.

What a difference a day makes! On Monday, the world markets cheered China’s proposed currency reform, firing up the risk trade. But, some of that euphoria seems to be fading already with US stocks closing in the red. In fact, the Dow Jones was up over 100 points at one point. A downgrade of BNP Paribas by Fitch and loan loss projections for Spanish banks by S&P reminded investors of Europe's debt troubles. The euro retreated from a one-month high against the dollar. The US currency is actually up against the yuan today.

The market may snap recent sharp gains which saw the key benchmark indices scale 2-1/2 month highs on Monday, 21 June 2010. Asian stocks were in the red. Trading of the S&P CNX Nifty on the Singapore stock exchange indicated that the Nifty could fall 16.50 points at the opening bell.

Nagarjuna Construction is planning to dilute ~49% stake by roping in a foreign partner in the special purpose vehicle executing the 1320-MW coal-fired plant in Srikakulam, Andhra Pradesh. (BL)

JSW Steel has demanded a stake in the controversial Obulapuram Mining Company or a definite deal to supply iron ore as talks with Karnataka’s Reddy brothers for taking over their steel company reach a crucial stage. (ET)

GMR Group is willing to buy stakes held by minority partners in all the three airports it operates if there is any such offer. (ET)

The department of public enterprises has proposed that the finance ministry classify loans to sick state-owned companies as priority sector lending, entitling them to lower interest rates and hastening their recovery. (ET)

The government is set to simplify Shops and Establishments Act, some of the provisions in the law may be amended or dispensed with. (BS)

The Union government proposes to switch over to specific rates for value added tax on petrol and diesel instead of the current ad-valorem (percentage) structure. (BS)

Insurance regulator, IRDA is set to frame new guidelines for ULIP products, to make them more attractive for policy holders. (FE)

After taking a small breather on Friday, the Indian markets resumed their northward journey today. Market sentiment got a fillip after the Government announced that IRDA will continue to oversee ULIPs, reviving the sales of the popular hybrid products.

Investors with a short-term trading perspective can buy the stock of Provogue India. This stock is in a strong uptrend since the low of Rs 41.4 recorded on May 26. It has recorded only three negative daily closes since this trough.